Caterpillar at Morgan Stanley Notes

Tom Pellette – President, Energy & Transportation

Oil usage is here to stay

“there is a lot of, you can go out on YouTube and see a lot of pundits talk about the end of the internal combustion engine or you hear countries that are announcing they’re not going to have any more internal combustion engines after a certain year. You also hear a lot about peak oil demand that as I detailed in my presentation yesterday, the world population is growing we still have 15% of the world population of 7.5 billion people that don’t have access to electricity and particularly in developing parts of the world there will be continued need for fossil fuels. In fact, the prediction is that the absolute usage even though the percentage will decrease, the absolute usage will continue to grow 2040 and beyond. So, we are very heavily focused on becoming more efficient cleaner engines but continuing to provide reciprocating engines to the industries that we serve and in fact oil and gas usage continues to advance as people want to improve their lives”

There’s an economic balance point for electric vehicles

“we talk about electric cars and still the adoption rate is very low and they are still more expensive than conventional cars. When people say, when they look at a country like Norway, they have a high adoption rate of electric cars, but then you look at it and it’s all subsidized. So eventually that economic balance point will be reached and then these technologies will be embraced a lot more quickly we’ll be ready.”

Amy Campbell

China construction has surprised with its strength

“So, China Construction has surprised us all year with its strength. We expected China to do better, we thought but it’s quite better than we thought it would. For many reasons, one being that the used equipment market there is not as robust and we think that’s driving some of the higher demand and more matured European and North America market you get lot more used equipment to leverage for the industry.”